Eagle Materials posts record 2Q revenue
US-based Eagle Materials Inc has reported a record revenue of US$623.6m in the 2QFY24-25 (ended 30 September 2024). Net earnings reached US$143.5m, according to a company statement.
Revenue in the Heavy Materials business, which includes cement, concrete and aggregates, joint venture and intersegment cement revenue, slipped by two per cent to US$418.7m. Heavy Materials operating earnings were down nine per cent to US$114.9m. The reduced performance was attribute to lower sales volumes, only partially offset by higher sales prices as well as the effects of the Aggregates acquisition.
Cement revenue for the quarter, including joint venture and intersegment revenue, edged down two per cent to US$352.8m and operating earnings saw a five per cent decline to US$115.9m due to lower cement sales and a US$7m increase in maintenance costs, partially offset by higher cement net sales prices. The average net sales price in the quarter picked up by three per cent to US$156.51/t as the result of price increases implemented earlier in 2024. Cement volumes were down five per cent to 2Mt, affected by adverse weather, particularly in Texas in July and the eastern markets in September.
Concrete and aggregates revenue slipped to US$65.9m, reflecting lower volumes which higher prices were unable to completely offset. The 2Q operating loss of US$1m has been attributed to lower volumes and approximately US$0.7m of expenses related to the step-up inventory values related to a US$24.9m aggregates acquisition in the quarter that saw the company buy a small mine near one of its Kentucky mines.
In the Light Materials business, which includes gypsum, wallboard and paperboard, revenue picked up by five per cent too US$244.1m, reflecting higher wallboard and paperboard sales volumes and prices. Gypsum wallboard sales volumes improved by three per cent to 752Mft2 while the average gypsum wallboard net sales price increased by one per cent to US$236.88. Paperboard sales volume was up six per cent to 85,000t with the average net sales price to US$959.19/t, representing a 10 per cent increase YoY. Operating earnings in the sector advanced by five per cent to US$98.2m due to higher volumes and prices.
Commenting on the second quarter results, Michael Haack, president and CEO, said, “Eagle’s portfolio of businesses continued to perform well despite ongoing adverse weather during the quarter, which affected sales volumes primarily in our Cement and Concrete and Aggregates businesses. We generated record revenue of US$624m and increased cashflow from operations by 35 per cent to US$233m. We used our strong cashflow to continue advancing our long-term growth and value-creation strategies: during the quarter, we completed a bolt-on aggregates acquisition, returned $69 million of cash to shareholders through share repurchases and dividends, and strengthened our balance sheet, ending the quarter with debt of US$1.1bn and a net leverage ratio (net debt to Adjusted EBITDA) of 1.2x.”
First-half FY24-25 sees improved net earnings
Eagle Materials posted a revenue of US$1.232bn in the six months ended 30 September 2024 (1HFY24-25), up 0.6 per cent from US$1.224m in the equivalent period of the previous financial year.
EBITDA increased by 1.5 per cent to US$377.6m in the 1HFY24-25 from US$372m in the 1HFY23-24. Net earnings improved by 2.2 per cent YoY to US$277.3m from US$271.4m over the same period.
In the Heavy Materials segment, revenue decreased to US$740.1m in the 1HFY24-25 from US$747.9m in the equivalent period of the previous year. Of this total, cement revenue accounted for US$613.1m, down from US$614.4m while concrete and aggregate sales fell to US$127m from US$133.5m.
Operating earnings in the segment remained stable at US$207.m although concrete and aggregates reported a drop in operating earnings to US$2m in the 1HFY24-25 from US$11.7m in the 1HFY23-24. Wholly-owned cement operations improved their earnings to US$188.1m from US$182m over the same period while joint venture cement operations reported an uptick to US$17m from US$13.5m.
In the Light Materials business, gypsum wallboard revenue increased to US$432.8m in the 1HFY24-25 from US$428.3m in the year-ago period. Of this total gypsum wallboard revenue improved to US$432.8m from US$428.3m while recycled paperboard revenue picked up to US$59.4m from US$47.5m over the same period.
Light Materials operating earnings improved to US$200.6m from US$191.3m. Gypsum wallboard earnings advanced to US$184.1m from US$176.6m in the equivalent period of the previous year while earnings in the recycled paperboard segment increased to US$16.5m from US$14.8m.
